In a surprising turn of events, India has emerged as an unexpected standout in HSBC’s realm of profits, outshining China and solidifying its position as the third-most profitable region for the Hong Kong and Shanghai Banking Corp Ltd (HSBC) in the fiscal year of 2023.
The financial behemoth disclosed a remarkable 25 percent upswing in profits stemming from its India operations, reaching an impressive $1.5 billion by the end of December 2023, a significant leap from the $1.2 billion generated in 2022.
The annual report issued by HSBC provided valuable insights into the factors propelling India’s exceptional performance. A notable contributor to this success was a substantial decrease in anticipated credit loss provisions, plummeting from $90 million in 2022 to $51 million in 2023.
HSBC’s global banking and markets segment emerged as the primary revenue generator in India, witnessing a robust 24 percent surge in profits to $774 million in 2023 from $622 million the preceding year. Moreover, the commercial banking sector, which caters to small and medium enterprises (SMEs), experienced a remarkable 31 percent increase in pre-tax profits, soaring to $398 million.
The optimism surrounding India within HSBC stems from the recognition of the nation’s economic potential. The bank emphasized that India, along with Vietnam, stands among the fastest-growing economies globally, benefiting from competitive labor costs, supportive policies, and evolving supply chains. With 42,000 employees contributing to its operations in India, HSBC foresees strong economic momentum persisting in South and Southeast Asia throughout 2024.
The divergence in fortunes between India and China within HSBC’s financial landscape becomes starkly evident when comparing their profit trajectories. While India soared with a 25 percent profit increase, China witnessed an 89 percent plummet in profits, nosediving from $3.40 billion in 2022 to a mere $371 million in 2023.
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